Nokia has swung back into making a first quarter loss of Eu257m, but the Finnish manufacturer has hit record sales of its Lumia handsets.
In the manufacturer's devices and services wing, which accounts for its phone performance, net sales were Eu2.9bn for the three months to 31 March, down 25% on its previous trading quarter and down 32% on the same period in 2012. It sold 6.1m smartphones during the quarter, worth Eu1.16bn. Smartphone sales were down 5% in value terms on the previous quarter and down 32% on 2012. Lumia sales accounted for 5.6m of total smartphone sales, up 27% on its previous quarter.
It also sold 55.8m feature phones, worth Eu1.59bn. The value of these sales plummeted 36% on the previous quarter and 31% on the same period last year.
The continued drive in selling its latest generation of Lumia devices lead to its average selling price for smartphones moving quarter on quarter by 3% to Eu191. Compared to a year ago, it is taking 34% more from smartphone sales.The devices and services wing posted an operating loss of Eu42m for the quarter, an improvement on its Eu218m loss last year but swinging back sharply from the Eu263m profit posted in its fourth quarter.
Across Nokia's entire business, it had sales of Eu5.85bn, down 27% on its previous quarter and 20% on 2012. Stripping out exceptional items, Nokia would have posted a small profit of Eu74m. As it stands, its loss of Eu257m is a marked improvement on the Eu1.47bn it lost in the first quarter of 2012.
Nokia CEO Stephen Elop said: 'At the highest level, we are pleased that Nokia Group achieved underlying profitability for the third quarter in a row. While operating in a highly competitive environment, Nokia is executing our strategy with urgency and managing our costs very well.
'We have areas where we are making progress, and areas where we are further increasing the focus. For example, people are responding positively to the Lumia portfolio, and our volumes are increasing quarter on quarter. Nokia Siemens Networks delivered another strong quarter and contributed to an overall improvement in Nokia Group's cash position. On the other hand, our mobile phones business faces a difficult competitive environment, and we are taking tactical actions and bringing new innovation to market to address our challenges.'
Looking ahead, Nokia said it expects Lumia sales growth to outpace that of the 27% it reported in its first quarter. The manufacturer is prepping a six inch phablet for launch in the fourth quarter.
Author: Graeme Neill